February 6, 2017
The article on Reuters titled Oracle-NetSuite Deal May Be Sweetest for Ellison emphasizes the perks of being an executive chairman like Larry Ellison, of Oracle. Ellison ranks as the third richest person in America and fifth in the world. The article suggests that his fortune of over $50B is often considered as mingling with Oracle’s $160B in a way that makes, if no one else, at least Reuters, very uncomfortable. The article does offer some context to the most recent acquisition of NetSuite, for which Oracle paid a 44% premium on a company of which Ellison owns a 45% stake.
NetSuite was founded by an ex-Oracle employee, bankrolled by Ellison. While Oracle concentrated on selling enterprise software to giant corporations, the upstart focused on servicing small and medium-sized companies using the cloud. The two companies’ businesses have increasingly overlapped as larger customers have become comfortable using web-based software.
As a result, it makes strategic sense to combine the two firms. And the process seems to have been handled right, with a committee of independent Oracle directors calling the shots.
The article also points out that such high surcharges aren’t all that unusual. Salesforce.com recently paid a 56% premium for Demandware. But in this case, things are complicated by Ellison’s potential conflict of interest. If Oracle had done more to invest in cloud business or NetSuite earlier, say four or five years ago, they would not find themselves forking over just under $10B now.
Chelsea Kerwin, February 6, 2017
December 23, 2016
The on-demand car service Uber established a business model that startups in Silicon Valley and other cities are trying to replicate. These startups are encountering more overhead costs than they expected and are learning that the on-demand economy does not generate instant cash flow. The LA Times reports that, “On-Demand Business Models Have Put Some Startups On Life Support.”
Uber uses a business model revolving around independent contractors who use their own vehicles as a taxi service that responds to individual requests. Other startups have sprung up around the same on-demand idea, but with a variety of services. These include flower delivery service BloomThat, on-demand valet parking Zirx, on-demand meals Spoonrocket, and housecleaning with Homejoy. The problem these on-demand startups are learning is that they have to deal with overhead costs, such as renting storage spaces, parking spaces, paying for products, delivery vehicles, etc.
Unlike Uber, which relies on the independent contractor to cover the costs of vehicles, other services cannot rely on the on-demand business model due to the other expenses. The result is that cash is gushing out of their companies:
It’s not just companies that are waking up to the fact being “on-demand” doesn’t guarantee success — the investor tide has also turned. As the downturn leads to more cautious investment, on-demand businesses are among the hardest-hit; funding for such companies fell in the first quarter of this year to $1.3 billion, down from $7.3 billion six months ago. ‘If you look in venture capital markets, the on-demand sector is definitely out of favor,’ said Ajay Chopra, a partner at Trinity Ventures who is an investor in both Gobble and Zirx.
These new on-demand startups have had to change their business models in order to remain in business and that requires dismantling the on-demand service model. On-demand has had its moment in the sun and will remain a lucrative model for some services, but until we invent instant teleportation most companies cannot run on that model.
Whitney Grace, December 23, 2016
December 19, 2016
Google has been very busy launching AI solutions. For example, ReCode tells us, “Pow! Bang! Google Uses Its AI to Bring Visual Punch to Digital Comic Books,” while the New Atlas reports, “DeepMind AI Slashes Cooling Costs at Google’s Data Centers.” Making comic books easier to read is nice, and reducing electric consumption is even better. We would be happy, though, to finally see more relevant search results; perhaps Google will tackle that side project soon.
Recode’s Mark Bergen describes Google’s comic-book enhancement tool, called Bubble Zoom:
The latest [AI] insertion is a neat visual trick to make it easier to read comic books within the Google Play Books app. Unfurled at Comic-Con International, it’s called Bubble Zoom and does just that — zooms in on text bubbles in comics with one touch. Last fall, Google introduced new mobile formats for digital comics, an attempt to get more comics readers, a devotee-heavy group, spending time and money within Google’s digital media store.
That could work. Meanwhile, Google is certainly seeing financial benefits from its AI-enhanced data center cooling project. Michael Irving at the New Atlas explains:
Now, Google has set its DeepMind system loose on its massive data centers, and drastically cut the cost of cooling these facilities in the process. Running Gmail, YouTube, and the all-knowing Google Search guzzles a tremendous amount of power, and while Google has invested heavily in making its servers, cooling systems and energy sources as efficient and green as possible, there’s always room for improvement. Especially when the industrial-scale cooling systems are difficult to run efficiently, given the complex interactions that occur between equipment, environment and staff in a data center. To account for all those factors that a human operator or traditional formula-based engineering might miss, the team put DeepMind to work on the problem, and the result was a drastic reduction in power consumption for the center’s cooling systems.
The article goes on to describe how the difference was measured, using the PUE metric and the record-breaking results they achieved. Naturally, Google expects to apply this successful tool throughout their buildings. We’re told they also plan to share the methodology with other organizations, so they can reduce their energy consumption, too. No word yet on how they plan to monetize that initiative.
Cynthia Murrell, December 19, 2016
December 14, 2016
I remember a time, long ago, when my family was confident that newspapers and TV reporters were telling us most of the objective facts most of the time. We also had faith that, though flawed human beings, most representatives in Congress were honestly working hard for (what they saw as) positive change. Such confidence, it seems, has gone the way of pet rocks and parachute pants. The Washington Examiner reports, “Fishwrap: Confidence in Newspapers, TV News Hits Bottom.” The brief write-up gives the highlights of a recent Gallup survey. Writer Paul Bedard tells us:
Gallup found that just 20 percent have confidence in newspapers, a 10-point drop in 10 years. TV news saw an identical 10-point drop, from 31 percent to 21 percent. But it could be worse. Of all the institutions Gallup surveyed on, Congress is at the bottom, with just 9 percent having confidence in America’s elected leaders, a finding that is clearly impacting the direction and tone of the 2016 elections. And Americans aren’t putting their faith in religion. Gallup found that confidence in organized religion dropped below 50 percent, to an all-time low of 41 percent.
Last decade’s financial crisis, the brunt of which many are still feeling, has prompted us to also lose faith in our banks (confidence dropped from 49 percent in 2006 to just 27 percent this year). There is one institution in which Americans still place our confidence—the military. Some 73 percent of are confident of that institution, a level that has been constant over the last decade. Could that have anything to do with the outsized share of tax revenue that segment consistently rakes in? Nah, that can’t be it.
Cynthia Murrell, December 14, 2016
September 4, 2016
I noted this write up by the Rupert Murdoch outfit, the Wall Street Journal: “The CIA’s Venture-Capital Firm, Like Its Sponsor, Operates in the Shadows.” You may have to buy a dead tree version of the Wall Street Journal, go to your public library, or subscribe to read the source itself. (Don’t hassle me if the link begs for dollars. Buzz Mr. Murdoch and express your views.)
The point of the article is that the US government’s intelligence outfit operates a venture capital firm. That investment entity does business as In-Q-Tel. The goal, in my opinion, is to identify promising technologies which may have application at the Central Intelligence Agency. Please, note that much of the work at the CIA is not public. That’s because it mostly operates in secrecy. The fact that a government has secret activities is not exactly news.
Furthermore, whom do you think advises the Central Intelligence Agency and its various units? Choose from the following list:
- Immigrants without US entry authorizations
- Felons recently released from prison to a half way house
- Individuals working for governments antithetical to the posture of the United States
- Investigative journalists looking for a gig
- Individuals with clearances or a track record of serving the US.
Okay, you picked one to three. You may qualify for work at a large, “real news” outfit. If you selected item four, you now understand why the news about the individuals and the companies exposed to In-Q-Tel is stale.
Obviously those in the spy game want folks who are in the same fox hole.
The write up reveals this stunning factoid: In-Q-Tel provides only limited information about its investments, and some of its trustees have ties to funded companies.
With considerable assiduity, the write up lists the companies in which In-Q-Tel has invested and notes:
Of about 325 investments In-Q-Tel says it has made since its founding, more than 100 weren’t announced, although the identities of some of those companies have leaked out. The absence of disclosure can be due to national-security concerns or simply because a startup company doesn’t want its financial ties to intelligence publicized, people familiar with the arrangements said. While moneymaking isn’t In-Q-Tel’s goal, when that happens, such as when a startup it funded goes public, In-Q-Tel can keep the profit and roll it into new projects. It doesn’t obtain rights to technology or inventions.
There you go. Why not let another nation’s intelligence services invest in high potential but little known innovators? The US government is trying to bring more business discipline to some of its activities. Therefore, is it not logical that an intelligence agency seeking high value products and services can use the proceeds from its investments to further the work of the intelligence agency?
I guess that’s a thought foreign to some real journalists.
What does one expect the CIA and In-Q-Tel to do? Publish a daily newspaper detailing the companies, people, and technologies the CIA is interested in? What about going on Fox News and explaining what’s hot and what’s not in advanced technology? Oh, right. Technology is not as much fun as pundits who over talk one another.
I know that an outfit owned by Rupert Murdoch is in the news business. I know that gathering information from the In-Q-Tel Web site is really difficult. For me, information about In-Q-Tel is a bit of a yawner.
I would much rather read about some of the management methods used in some major media entities. Government efforts to identify cutting edge technologies is just not that interesting to me. Where’s the beef? Why not consider why certain categories of investments have not yielded products and services which can be used across missions? Why not explore why Purple Yogi was a dead end and why Palantir is not? Oh, right. That’s harder than realizing that in certain types of work one wants to deal with individuals from that fox hole.
Stephen E Arnold, September 4, 2016
August 8, 2016
I hate Internet ads. They pop up everywhere when I am trying to watch a video, read an email, or skim through an article. I know Internet ads are important to commerce and help keep certain services free, but why must they have sounds now? It should not come as a surprise with the amount of Internet ads that fraud would be associated with them at some point. The Register shares how to detect fraud in the story, “Digital Ad Biz Is Fraudulent By Design, Complain Big Brands.”
The World Federation of Advertisers (WFA) is a global trade body that represents the biggest spenders in digital advertising. (MasterCard and Unilever are two of the biggest cash cows.) Adverting fraud not only harms advertising firms, but also brands seeking to sell their products and services. The WFA urges advertising firms that they not only clean up their own acts, devout resources to fight fraud, and not be so desperate for clicks and pocket change.
Businesses end up buying “cheap” traffic to bolster their numbers, but they are throwing their dollars into a money pit. The WFA advises that businesses limit their digital investments to avoid fraud. The WFA also predicts that by 2025 digital ad fraud could exceed $50 billion a year.
Digital ad fraud can take many forms:
“There are many shady practices at work, falling into three categories, the report explains.
- Website fraud is where the operator is an ad network affiliate, such as in conversion fraud schemes.
- Platform fraud includes social network and user-generated-content hosting sites.
- Data fraud includes fiddling the numbers, for example by using a botnet.
Website fraud can be identified because the site sends more traffic to an ad exchange than its size suggests it should – so it could be bumping up the numbers. Website fraud encompasses a range of schemes including hidden ads, cookie stuffing, clickjacking and cloudbot traffic. The latter is where a hosting company’s IP addresses generate traffic.”
Ad fraud is easier than ever, because if you create a simple bot algorithm, paint yourself with a reputable ad business, and snap of a up clients you are set to wheel in the dollars. It is not unsurprising that ad fraud is so common and regulation is slow. Internet standards are hard to regulate, even Google has its own problems.
There is a Louisville, Kentucky Hidden /Dark Web meet up on August 23, 2016.
Information is at this link: https://www.meetup.com/Louisville-Hidden-Dark-Web-Meetup/events/233019199/
August 3, 2016
Does your business need a mentor? How about any students or budding entrepreneurs you know? Such a guide can be invaluable, especially to a small business, but Google and Bing may not be the best places to pose that query. Business magazine Inc. has rounded up “Ten Top Platforms for Finding a Mentor in 22016.” Writer John Boitnott introduces the list:
“Many startup founders have learned that by working with a mentor, they enjoy a collaboration through which they can learn and grow. They usually also gain access to a much more experienced entrepreneur’s extensive network, which can help as they seek funding or gather resources. For students, mentors can provide the insight they need as they make decisions about their future. One of the biggest problems entrepreneurs and students have, however, is finding a good mentor when their professional networks are limited. Fortunately, technology has come up with an answer. Here are nine great platforms helping to connect mentors and mentees in 2016.”
Boitnott lists the following mentor-discovery resources: Music platform Envelop offers workshops for performers and listeners. Mogul focuses on helping female entrepreneurs via a 27/7 advice hotline. From within classrooms, iCouldBe connects high-school students to potential mentors. Also for high-school students, iMentor is specifically active in low-income communities. MentorNet works to support STEM students through a community of dedicated mentors, while the free, U.K.-based Horse’s Mouth supports a loosely-organized platform where participants share ideas. Also free, Find a Mentor matches potential protégés with adult mentors. SCORE supplies tools like workshops and document templates for small businesses. Cloud-based MentorCity serves entrepreneurs, students, and nonprofits, and it maintains a free online registry where mentors can match their skill sets to the needs of inquiring minds.
Who knew so much professional guidance was out there, made possible by today’s technology, and much of it for free? For more information on each entry, see the full article.
Cynthia Murrell, August 3, 2016
July 27, 2016
I noted “Algorithmia Lands In-Q-Tel Deal, Adds Deep Learning Capabilities.” Useful write up but one important facet of the deal was omitted from the news item. The trend in some government projects is to have a “open” set of software. The idea of running a query for a needed widget on an ecommerce site hath its charms. The goal is cost reduction and reducing the time required to modify an existing software system. This is the idea behind the DCGS (Distributed Common Ground System) widget approach. The issue I have with brokering algorithms is that most of the algorithms which look like rocket science are actually textbook examples or variations on well known themes. Search and content processing chugs along on 10 methods. When a novel solution becomes available like this insight into Carmichael numbers appears, years may pass before the method can be verified and inserted into the usable methods folder. Now those doing the searching have to know what an algorithm actually does and what settings are required for the numerical recipe to generate an edible croissant. That human knowledge thing is an issue.
Stephen E Arnold, July 27, 2016
April 11, 2016
Impacting groups like Target to JP Morgan Chase, data breaches are increasingly common and security firms are popping up to address the issue. The article Dark Web data hunter Terbium Labs secures $6.4m in fresh funding from ZDNet reports Terbium Labs received $6.4 million in Series A funding. Terbium Labs released software called Matchlight which provides real-time surveillance of the Dark Web and alerts enterprises when their organization’s data surfaces. Consumer data, sensitive company records, and trade secrets are among the types of data for which enterprises are seeking protection. We learned,
“Earlier this month, cloud security firm Bitglass revealed the results of an experiment focused on how quickly stolen data spreads through the Dark Web. The company found that within days, financial credentials leaked to the underground spread to 30 countries across six continents with thousands of users accessing the information.”
While Terbium appears to offer value for stopping a breach once it’s started, what about preventing such breaches in the first place? Perhaps there are opportunities for partnerships with Terbium and players in the prevention arena. Or, then again, maybe companies will buy piecemeal services from individual vendors.
Megan Feil, April 11, 2016
April 11, 2016
The article on Pando titled Startups Anonymous: Things Founders Say to Investors That Are Complete BS is an installment from a weekly series on the obstacles and madness inherent in the founder/investor relationship. Given that one person is trying to convince the other to give them money, and the other is looking for reasons to not give money, the conversations often turn comical faster than it takes the average startup to go broke. The article provides a list of trending comments that one might overhear coming from a founder’s mouth (while their nose simultaneously turns red and elongates.) Here are a few gems, along with their translated meanings,
“Our growth has been all organic.” Translation: Our friends are using it. “My cofounder turned down a job at Google to focus on our company.” Translation: He applied for an internship a while back and it fell through. “We want to create a very minimalist design.” Translation: We’re not designers and can’t afford to hire a decent one. “This is a $50 billion per year untapped market.” Translation: I heard this tactic works for getting investors.”
The frustrations of fundraising is no joke, but founders get their turn to laugh at investors in the companion article titled What I’d Really Like to Say to Investors. For example: “If today, we had the revenue you’d like to see, I wouldn’t be talking to you right now. It’s as simple as that.” Injecting honesty into these interactions is apparently always funny, perhaps because as founders get increasingly desperate, their BS artistry rises in correlation.
Chelsea Kerwin, April 11, 2016